Opinion: Darling's green bank idea is laughably small

Alistair Darling’s proposal for a green investment bank is a laughable gesture for the benefit of the growing green brigade.

The public-private initiative would inject £2bn to boost offshore wind energy and jobs — and he says this is one way to move out of recession.

The £2bn is far too low to have any impact. The NHS IT project is currently costing £12bn. The government has injected more than £165bn to rescue banks, which are failing to feed that money back into the economy.

It will also take a long time to set this up, as money has to be raised first. The idea of forming a “war bond,” public funding system that the Tories propose, would have a been a good idea to have stolen — as it could be switched on tomorrow.

There is huge economic opportunity for revamping the UK’s infrastructure. MoneyWeek, for example, is still highlighting this for long-term investment portfolios. The fact the UK is (still) a leading economy and the terrain allows infrastructure to be closely knitted together means it could adapt fast and be technologically ahead of many countries.

But it isn’t.

Accounting firm KPMG estimates around £400bn is required to renew UK infrastructure. Not all this money should come from a green, government imitative, but it would be stupid not to make a UK revamp as low-carbon as possible.

Last week, New Energy Finance predicted that global investment in clean energy will total $200bn for 2010 (largely propped up by China). Yet to hit global carbon goals, an estimated $500bn annual, global investment is required.

When you first hear the words “a billion pounds,” it’s easy to think this is a lot of money to throw at cleantech. But let’s keep things in perspective — Bill Gates’ fortune rose by $13bn last year.

Editor’s note: This was an editorial by Dan Ilett, founder of Greenbang.